Credit Suisse (SIX:CSGN) published its delayed annual report on Tuesday, identifying “significant deficiencies” in its internal controls over financial reporting and saying it has not yet curbed customer outflows.
“As of December 31, 2022, the Group’s internal control over financial reporting is not effective and, for the same reasons, management has reassessed and reached the same conclusion as of December 31, 2021,” it said.
Auditor PwC included in the report an adverse opinion on the effectiveness of the bank’s internal controls.
Shaken by a series of scandals, the bank’s customer outflows in the fourth quarter amounted to more than 110 billion Swiss francs ($000 billion), prompting Credi Suisse to breach some liquidity caps.
In January, CEO Ulrich Koerner told the World Economic Forum in the Swiss city of Davos that the bank is seeing money “return to different sectors of the company.”
On Tuesday, the bank stated that “outflows have stabilized at much lower levels, but have not yet been reversed.”
The annual report, scheduled for release last week, was delayed at the request of the U.S. Securities and Exchange Commission, which had raised questions about the bank’s previous financial statements.
Last week, Credit Suisse said it had been contacted by the SEC regarding previous revisions to the 2019 and 2020 consolidated financial statements.
On Monday, the bank’s share price fell more than 14% to a record low, amid market turmoil triggered by the collapse of U.S. banks Silicon Valley Bank and Signature Bank.
The cost of insuring against a Credit Suisse debt default also rose to a new all-time high of 466 basis points, up 49 basis points from Friday’s close.
On Monday, Swiss regulator FINMA warned that it is trying to identify any potential risk of contagion for the country’s banks and insurers, following the collapse of U.S. banks.
“The goal is to identify any collective and potential risk of contagion at an early stage,” he said.
(1 US dollar = 0.9129 Swiss francs)